It would be nihilistic to encourage smoking just because it saved the NHS money. He was just pointing out that there was an irony that people who died younger ended up taking less out of the NHS than those who lived longer, healthier lives.

Edit: I guess there are other examples of paradox like situations in public policy too. For example it is good for the individual if they save money but bad for the economy as a whole. Having too many savers can lead to a situation like Japan where people immediately save any economic stimulus they are given, so it doesn’t stimulate the wider economy.